Kathmandu — The government’s recently released “Energy Consumption Growth and Export Strategy, 2026/27” indicates that Nepal’s energy development priorities are now shifting toward reservoir-based hydropower projects and solar energy.
The strategy, which sets a target of generating 24,500 MW of electricity by fiscal year 2035/36, is based on long-term energy security, increasing domestic consumption, and electricity exports as its main pillars.
The policy gives special priority to reservoir-based and semi-reservoir hydropower projects. The government has concluded that reservoir projects are essential to balance the current system, where production peaks during the rainy season but declines sharply in the dry season.
Accordingly, the 1,200 MW Budhi Gandaki reservoir hydropower project has been placed under strategic priority. Long discussed, the project is being positioned as a cornerstone of national energy security. Similarly, the 670 MW Dudhkoshi reservoir hydropower project has been targeted for completion by 2034/35.
Alongside hydropower, the government plans to expand solar energy as a key part of the national energy mix. Under this plan, the Nepal Electricity Authority will develop 1,000 MW of solar projects, while the private sector will be encouraged to develop additional solar projects on a competitive basis.
The strategy also assigns a high role to the private sector in energy development. Through the Independent Power Producers’ Association of Nepal (IPPAN), the government aims to facilitate the construction of projects totaling around 14,000 MW, signaling that private developers will be major partners in future energy expansion.
Major hydropower projects such as Upper Arun, Nalgad Hydropower Project, Arun IV, and North Ganga Hydropower Project are also included in the strategy.
For the first time, the government has attempted to integrate reservoir hydropower, solar energy, and export markets into a single strategic framework. However, challenges may arise in implementation if transmission line expansion, investment assurance, and construction timelines are not effectively managed.
Urjasanchar